Private jets receive ludicrous tax breaks that hurt the environment
The blue jeans and T-shirts of the global elite are no more comfortable than those worn by the middle class. They drink the same coffee, watch the same films and carry the same smartphones. But a gulf yawns between the rich and the rest when they fly. Ordinary folk squeeze agonisingly and sleeplessly into cheap seats. The elite stretch out flat and slumber. And the truly wealthy avoid the hassles and indignities of crowded airports entirely, by taking private jets. This would be no one else’s business but for two things. First, private jets are horribly polluting. Second, they are often—and outrageously—subsidised.
Private aviation was hit hard by the global financial crisis, when both companies and individuals sought to pare expenses. But now private jets are booming again. This is partly because new booking services and shared-ownership schemes are cutting the cost of going private and luring busy executives away from first-and business-class seats on scheduled flights. But the boom is also a result of tax breaks, which are even more generous than those lavished on ordinary airlines. In Europe firms and individuals can avoid paying value-added tax on imported private jets by routing purchases through the Isle of Man. This scheme has cut tax bills by £790m ($1bn) for imports of at least 200 aircraft into the European Union since 2011. America’s rules are loopier still. Donald Trump’s tax reform allowed individuals and companies to write off 100% of the cost of a new or used private jet against their federal taxes. For some plutocrats this has wiped out an entire year’s tax bill. For others, it has made buying a jet extraordinarily cheap.